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What Beer Pricing Tells Us About Incentives | Strategic Pricing Solutions

Last month I attended two Major League Baseball spring training games with some long-time friends.  Of course, our experience included beer, because ball parks and beer go together so well. Buying the beers also reminded me that in pricing strategy, how you structure your prices is just as important as the prices you set.

One friend, Tom, was the first to buy a beer.  When he arrived at our seats with a pilsner-filled souvenir cup, he told us the first beer cost $10; however, if he brings his cup back, the 2nd beer would only cost $6.  I have written many times that although the prices of food and drinks seem high at sporting events relative to other situations, the stadiums would be fools not to have high prices for them.  It is primarily the event and the ticket prices of the event that determine whether people will attend.  Once there, if they are hungry or thirsty, they will pay high prices for food and drink.  So why would this stadium offer a lower price?

The answer to that is simple.  The stadium was trying to get their patrons to consume more than they otherwise might.  This is similar to a common car-wash incentive.  If you bring your car back within 7 days, the price of the 2nd wash is greatly reduced.

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What Beer Pricing Tells Us About Incentives.

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